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Despite the Federal Reserve's rate hike, average interest rates on savings accounts and money market accounts offered by U.S. banks fell during the first quarter of 2017, according to the quarterly America's Best Rates survey by MoneyRates.com.

The Fed raised interest rates during the first quarter, but you might not have noticed a difference if you are a bank deposit customer - unless you bank online.

While bank ratesoverall are not moving in favor of consumers, there are still places bank customers can go to find higher rates with higher rates often found in online savings accounts and money market accounts. Increasingly, it seems most bank customers with traditional, branch-based accounts are getting left behind not just by banking technology, but also by online bank rates.

The America's Best Rates survey found that while savings account interest rates and money market rates continue to languish well below 1 percent on average, there are a number of exceptions that offer a better deal for discriminating deposit customers. The America's Best Rates survey is based on a sample of 100 U.S. deposit banks representing a cross-section of the industry. It is comprised of 50 large banks, 25 medium-sized banks, and 25 small banks.

Best Savings Account Rates

The overall average of savings account interest rates surveyed was 0.224 percent, down slightly from the prior quarter. However, the survey found nine banks offering savings account rates of 1 percent or better.

Eleven banks made this list of top savings account rates due to a tie for tenth place. Significantly, 10 of those eleven top bank rates were from online accounts. This is indicative of the overall trend for online vs. traditional accounts. The average online savings account rate in the first quarter was 0.634 percent, nearly nine times the average of 0.072 percent for traditional accounts.

Best Money Market Account Rates

Money market rates also dipped a bit during the first quarter, down to an average of 0.182 percent.

The trend for online money market accounts echoes that of savings accounts, with online accounts offering a clear advantage. Eight of the top 10 money market rates were from online accounts. Overall, online money market accounts averaged 0.539 percent during the first quarter, compared with an average of 0.091 percent for traditional money market accounts.

How to Earn Higher Interest Rates for Savings

Recent economic developments have sent mixed signals about what is next for interest rates. The Fed acted in mid-March to raise short-term interest rates on the basis that the employment market has been strong and inflation has been on the rise in recent months. However, within the first two weeks of April came two important economic reports signaling possible economic weakness: a disappointing job growth figure for March, and news that consumer prices had declined during the month.

Even before this disappointing economic news, most banks had held off on raising deposit rates, and signs of possible weakness in the economy may make them even more reluctant to boost interest rates. While the sudden drop in consumer prices does provide some relief to deposit customers who were increasingly seeing their bank rates fail to keep up with inflation, it won't do anything to help people earn higher savings rates.

For that, consumers would be wise to take matters into their own hands by shifting their savings and money market accounts to one of the banks on the above lists. When the trend in bank rates is not in your favor, look for a bank that is bucking that trend.

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Many of the savings offers appearing on this site are from advertisers from which
this website receives compensation for being listed here. This compensation may impact
how and where products appear on this site (including, for example, the order in which
they appear). These offers do not represent all deposit accounts available.

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